Transportation

New York, Still Wary of Sharing, Goes to Court to Stop Lyft


New York State officials are seeking a temporary restraining order against Lyft, the Uber competitor that announced plans this week to start offering its ride-sharing services in New York City. Superintendent of Financial Services Benjamin Lawsky and Attorney General Eric Schneiderman accuse Lyft of failing to follow state and local licensing rules. The company, known for its pink-mustached vehicles, was set to begin service in New York City on Friday, July 11.

Schneiderman has already tangled with both Uber and the Airbnb, another stalwart of the so-called sharing economy that allows people to rent out spare bedrooms or entire homes. He cited concerns that Airbnb could be undermining tenant and tourist protections, and he subpoenaed user data from Airbnb last year. The parties announced a settlement last month.

Earlier this week Schneiderman once again brokered a deal with a sharing startup, this time through an agreement with Uber to restrict its practice of surge pricing for rides during emergencies. The attorney general’s office had been investigating whether Uber violated price-gouging laws in the past.

In the new complaint against Lyft, Schneiderman’s office said this:

“As it has done in every other city in which it operates, defendant has simply waltzed into New York and set up shop while defying every law passed whose very purpose is to protect the people of the state of New York.”

A Lyft spokesperson replied:

“We are in a legal process with local regulators today and will proceed accordingly. We always seek to work collaboratively with leaders in the interests of public safety and community, as we’ve done successfully in cities and states across the country, and hope to find a path forward for ridesharing in New York.”

Lyft’s awkward entry stands in something of a contrast with Uber, which (surge-pricing issue aside) seems to have reached an accord with local regulators in New York—at least compared with its apparent defiance of cease-and-desist orders elsewhere. Under a pilot program, New York City’s signature yellow cabs can be hailed using the Uber app, while Uber’s black cars are subject to the same regulations as any others.

“New York is, I guess, kind of unique in that we haven’t had to deal with the same issues that other cities have with respect to this ride-share issue,” Allan Fromberg, a deputy commissioner for the Taxi and Limousine Commission, said earlier this month. “We’ve made it extremely clear exactly what our rules and regulations are and that, you know, we will take the appropriate enforcement action for any vehicle that’s operating outside the umbrella of licensure.”

Eidelson is a reporter for Bloomberg Businessweek in Washington.

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